How to Buy a House Without a Real Estate Agent

The Impact of the NAR Lawsuit and What It Means for You

There has been a major shift in how real estate transactions work due to a recent NAR (National Association of Realtors) lawsuit. The outcome? More transparency in real estate fees, meaning you're now more likely to encounter buyer's agreements.

In this new environment, if you're working with a buyer’s agent, you’ll negotiate two things:

• Their commission.
• How long they represent you.

But this transparency has also led many buyers to consider not using an agent at all. So, how do you approach buying a home without an agent?

Step One: Get Pre-Approved

Agent or no agent, the first step always remains the same: Get pre-approved. This is important for many reasons:

• Listing agents and sellers will want a pre-approval to ensure you're a serious buyer before they even show you the property. Without a real estate agent, this step becomes even more critical.
• A pre-approval gives you a clear understanding of what you can afford, streamlining your decision-making.

Many sellers these days won't show the property to someone who isn't pre-approved. So, make this a priority.

Who Will Handle the Offers and Contracts?

If you're not using a buyer's agent, you’ll need to ask yourself, “Who will handle the paperwork?”

Here are your options:

• DIY (Do It Yourself): You can download a generic contract and fill out the necessary details yourself. Many states allow for this.
• Hire an Attorney: Alternatively, you can hire a real estate attorney to do this for you. While this costs money upfront, they can help avoid future headaches by ensuring your agreements are legally sound.

Either way, remember that the listing agent represents the seller. You should not rely on them to handle your interests. In some states, dual agency (one agent representing both sides) is not even legal. Be cautious here.

Determining What the Property is Worth

A key aspect of going it alone is figuring out how much a house is actually worth. Without an agent to pull market data for you, here’s what you should do:

• Look Up Comparable Sales: Check surrounding properties to see what they sold for recently. Platforms like Zillow can help, but make sure you’re comparing apples to apples (homes in similar condition, size, and location).
• Browse Active Listings: Get familiar with the market by viewing various properties to see what’s available and at what price points.

Remember, just because a seller asks for a certain price doesn't mean the house is worth that. If you’re getting a mortgage, the lender will require an appraisal, and if the home doesn’t appraise for the agreed purchase price, you have options to renegotiate or walk away (depending on how your contract is structured).

Negotiating Without an Agent

Without a buyer’s agent, you are the negotiator. This means you’re responsible for:

• Making the offer.
• Countering responses.
• Deciding on contingencies like timelines for inspections or repairs.

You’ll be going head-to-head with the listing agent, who is experienced and motivated to get the best deal for the seller. Before submitting your offer, research the agent you’re dealing with. Look at their reviews and past experience. The more you know about whom you're negotiating against, the better prepared you'll be.

Accessing Properties Without an Agent

You might wonder how you'll access homes without an agent. Usually, you’ll need to work directly with the listing agent:

• Open Houses: These are your easiest point of access. Make the most of them, as you won’t need to coordinate with an agent.
• Private Showings: Call the listing agent directly, but be ready with your pre-approval. Many sellers' agents feel uncomfortable showing homes to unqualified buyers, especially those without their own representation. However, as a serious buyer, you should still have access.
  
  

Inspections and Due Diligence

Once you’ve had an offer accepted, you’ll move into the inspection phase. Here’s what you’ll need to keep in mind:

• Order Your Own Inspections: Your lender might not require specific inspections, but you should conduct due diligence. This could include general home inspections, roof checks, plumbing, electrical, etc.
• Review Reports Carefully: If any serious issues come up, you might have to renegotiate with the seller to either make repairs or lower the sale price. You'll also have the option to walk away if major red flags arise.
  

The Need for a Strong Lender

When you don’t have an agent guiding you through the process, a strong lender becomes even more critical. Here’s why:

• They’ll flag any issues with the property or the paperwork that could harm your chances of finalizing the deal.
• They can offer advice about requirements, and potential red flags that a real estate agent would typically spot.

Your lender will also be there to explain the steps, whether it's the appraisal process, the need for homeowner’s insurance, or setting up escrow.

Risks and Challenges

Is going without a buyer’s agent risky? Yes, but it’s not impossible. Much of the process can be handled as long as you're well-prepared. You might face challenges with:

• Legal and contractual issues: Without a professional, it could be easy to overlook key clauses that protect your finances.
• Negotiation pressure: Going up against a professional can sometimes put you at a disadvantage.
• Limited guidance: You’ll want to stay informed and understand each step without the guidance that comes from an agent experienced in the field.

That said, if you've had negative experiences with agents or just don’t want to pay for one, it’s your decision. You'll need to be thorough, think ahead, and ensure you have a solid team (lender, attorney) backing you where necessary.

Conclusion

Buying a house without a real estate agent requires research, patience, and diligence. But it can absolutely be done—and successfully at that. Whether you’re doing it to save money or because you want to be more hands-on, you’ll need to ensure you get pre-approved, research property values, and carefully handle the contractual details.

This method puts more responsibility on your shoulders, so make sure you’re comfortable with collecting the necessary data to make informed decisions. Just remember, with the right lender and some strategic moves, owning a home without a real estate agent is entirely possible.

If you're ready to start the process, feel free to reach out for questions. We're here to help with your mortgage needs and guide you along the way. 786-933-2077

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